Brussels, 21 March 2012 – To make the EU single market work better for workers and for business, the Commission has proposed new rules to increase the protection of workers temporarily posted abroad. Worker protection and fair competition are the two sides of the EU single market's coin, yet findings suggest that minimum employment and working conditions are often not respected for the one million or so posted workers in the EU. To address the specific issues of abuse where workers do not enjoy their full rights in terms of for example, pay or holidays, especially in the construction sector, the Commission has put forward concrete, practical proposals as part of an enforcement Directive to increase monitoring and compliance and to improve the way existing rules on posted workers are applied in practice. This will ensure a level playing field between the businesses involved, excluding companies that don't follow the rules.

To send a strong message that workers' rights and their freedom to strike are on an equal footing with the freedom to provide services the Commission has also put forward a new regulation that takes on board existing case law. This is especially relevant in the context of cross-border services provision like the posting of workers. The overall aim of both proposals is to boost quality jobs and increase competitiveness in the EU by updating and improving the way the single market works, while safeguarding workers’ rights.

Following the adoption of the legislative package, President Barroso said ". I promised the European Parliament in 2009 that we would clarify the exercise of social rights for the posting of workers. The free provision of services within the internal market represents a major growth opportunity. But the rules need to apply equally to all. This is not always the case for workers posted in another Member State. Today, the European Commission is taking concrete action to stamp out the unacceptable abuses. We want to ensure that posted workers enjoy their full social rights across Europe.

Commenting on the importance of the proposals for both workers and business, László Andor, EU Commissioner for Employment, Social Affairs and Inclusion underlined “Temporarily posting workers should be a win-win for EU labour markets and for businesses, but it cannot be used as a way to sidestep minimum social standards. Mr Andor stressed that the single market would only work efficiently with fair competition, saying “Today’s proposals clarify the rules on posted workers for everyone and put practical safeguards in place against social dumping and poor working conditions, especially in the construction sector where posting of workers is most prominent and reports of abuse are highest”.

Background

The proposed Enforcement Directive aims to improve the way the 1996 Directive on the posting of workers is applied in practice, without changing its provisions. In particular, the Enforcement Directive would:

set more ambitious standards to inform workers and companies about their rights and obligations;

establish clear rules for cooperation between national authorities in charge of posting;

provide elements to improve the implementation and monitoring of the notion of posting to avoid the multiplication of "letter-box" companies that use posting as a way to circumvent employment rules;

define the supervisory scope and responsibilities of relevant national authorities;

improve the enforcement of workers’ rights, including the introduction of joint and several liability for the construction sector for the wages of posted workers as well as the handling of complaints.

The proposed Monti II Regulation addresses concerns that, in the single market, economic freedoms would prevail over the right to strike, stressing that there is no primacy between the right to take collective action and the freedom to provide services. It also sets out a new alert mechanism for industrial conflicts in cross-border situations with severe implications. In no way does the Regulation affect national legislation on the right to strike, nor would it create obstacles to the right to strike.

Each year, around one million workers are posted by their employers across EU borders to provide services (0.4% of the EU workforce). The biggest “sending“countries are PL, DE, FR, LU, BE and PT. These workers play an important role in filling labour and skill shortages in various sectors and regions like construction, agriculture and transport. Posting also plays an important role in providing specialised, high-skilled services, such as information technology.

The EU’s single market gives companies the freedom to provide services in other Member States, including the possibility to post temporarily post workers to other Member States to carry out specific projects. This enables companies to offer their specialised services throughout the EU Single Market, contributing to greater efficiency and economic growth.

Posted workers do not enter the host country's labour market, as they remain employed by their company in the sending Member State.

To facilitate the posting of workers and to ensure fair competition as well as guaranteeing an appropriate level of protection of posted workers, the 1996 Directive defines a core set of employment conditions which the service provider has to comply with during the posting in the host Member State. This includes the applicable minimum rates of pay, holidays, maximum working hours and minimum rest periods, as well as health and safety at work.

In practice, these core employment conditions are often incorrectly applied or not enforced in the host Member State. Posting can be abused by companies artificially establishing themselves abroad, just to benefit from a lower level of labour protection or lower social security contributions. Posted workers are often more vulnerable given their situation abroad. The new proposal would introduce more effective provisions to ensure the 1996 posting of workers Directive is applied effectively on the ground.

The European Court of Justice Viking Line and Laval judgments triggered an intense debate about the extent to which trade unions are able to defend workers' rights in cross-border situations, involving posting or relocation of companies. The judgements have been interpreted by some stakeholders as meaning that economic freedoms would prevail over social rights and in particular the right to strike. The new enforcement Directive and Monti II Regulation confirm that this is not the case.